What the Lib Dems need to do to get back on track in 2013

Stopping the worst excesses of the Tories is not enough. The party needs radical new policies.

We’re bumping along in the polls at around 10 per cent, we have the most unpopular leader of all the major political parties, and in the last three Westminster by-elections we came third, fifth and eighth, losing our deposits in two of the three campaigns. You might think the Lib Dems go into 2013 with a large black cloud hanging overhead and an awful sense of impending doom. You’d be wrong.

The grassroots are surprisingly chipper. In the most recent Lib Dem Voice survey (fieldwork just before Christmas), 77 per cent of respondents said they continued to support the party being in coalition, 61 per cent said they thought the party was on the right course, and (hold onto your hats) 58 per cent said they were either "very satisfied" or "satisfied" with Nick’s leadership.

How come? Well, partly it’s the Pollyanna lurking inside every Lib Dem. Doing less than spectacularly in mid-term polls is the default expectation for most grassroots members (even if by-election disaster after disaster is something of a novelty), so this doesn’t feel like particularly alien territory for most folk. It’s also true when you look at local election results – and when we think about the 2015 general election, we think of it at a local level – we’ve done rather better in 2013 than most people realise.

And many in the party genuinely look at the good things the Lib Dems have achieved in government – 2 million out of income tax altogether, the pupil premium, Green Investment Bank et al – and think actually, for doing all that, unpopularity is a price worth paying. And that’s a fair point. But I can’t help but feel the party may have listened to the Prime Minister’s call for the country to approach 2013 with a sense of realism and optimism a tad too literally.

So here’s my two pennies' worth for the next 12 months if the Lib Dems are going to get back on electoral track.

We have a ‘new’ positioning of the party as the only repository of both economic competence and social justice. Of course, it’s not new– Nick announced it at conference in September 2011. But it’s not really stuck has it? Might I suggest that this may have something to do with the fact that demonstrating economic competence during the worst economic malaise for 80 plus years is quite tricky? Ditto social fairness, when the last government before you has spent all the money, and you’ve got your coalition partners introducing a benefit cap and apparently encouraging words like ‘feckless’ and ‘workshy’ to be bandied about.

So if that’s the strategy, fine – but we’ll need some rather better communications to get it resonating than we’ve managed to date. Might I suggest ditching the HQ line of ‘the Lib Dems are working to build a stronger economy in a fairer society, enabling every person to get on in life’ for the rather snappier ‘Lib Dems represent the head and the heart’. Folk might actually remember that.

And while stopping the worst excesses of the Tories is as important as ever – the snoopers' charter being just a starter – that won’t be enough. Neither will shouting ‘well, what would you do then?’ on a continuous loop at the Labour Party. We need some new, exciting policy initiatives of our own. Our newly elected federal policy committee needs not just to be thinking about the general election manifesto for 2015. It need to be presenting conference very quickly with some radical new thinking for debate and agreement. And then we need to be presenting it to the country.

As a party, we spent too long on our non-differentiation strategy with our coalition ‘partners’ – and we are now similarly in danger of thinking that if we shout at the Tories about how awful they are for the next 30 months, all will be right in the world. It won’t. We have 12 months to show the country we are still the radical, reforming and creative political party the members all joined. And if we do that, combined with our record to date, we’ve got a half a chance.

Richard Morris blogs at A View From Ham Common, which was named Best New Blog at the 2011 Lib Dem Conference.

Nick Clegg delivers a speech to the Centre Forum at The Commonwealth Club on December 17, 2012 in London. Photograph: Getty Images.

Richard Morris blogs at A View From Ham Common, which was named Best New Blog at the 2011 Lib Dem Conference

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.